Where financial products are mis-sold, there is an aspect at the heart of the mis-selling that make the products seem more attractive to the general public. Aside from ‘sky-high returns’, mis-selling schemes often use the environment as a way to attract people who want to invest in the environment. 

Often, the advisers will say that your money goes to replanting new trees in some far-off land. Maybe it helps fund the repopulation of an endangered species. Whatever it is, schemes like this appeal to our charitable sides, and they’re particularly appealing to people interested in environmental welfare. It’s one of many reasons that finance experts think that ‘mis-selling’ is too soft a word for such practices. Anyway, to ensure that you’re not duped by environmental scams, here are the main mis-selling schemes that use the environment for profit. 

SCS Farmland, Argentina

The promotion originally read something along the lines of: ‘160% guaranteed Fixed Return’ which would rightly cause more than a few raised eyebrows among those with the financial know-how. However, for those without (and especially people without investment experience), it didn’t sound too bad an offer. 

The promotion in question was the SCS Farmland scheme, which sold investors a slice of lush, green Argentinian farmland with the option to sell it back over a period of 5-10 years (once the aforementioned returns had built up). Here’s how it worked: for a five-year investment, the investor would receive a fixed annual payment which would increase from 9% to 15%, concluding with the return of their original capital, as well as adding a maximum of 66% profit. For ten-year investments, annual payments would start at 10% and would rise to 40% (adding a profit of 160% overall). Sounds good, right?

The whole thing fell through because of the various companies involved in the scheme. There were too many (an oversight which would have been dealt with had the scheme been covered by the Financial Conduct Authority). Investors paid their money to the advisers (who in this case were probably Worldwide Investments of Cambridge) who then had to put the money through another company called Powerscourt Services Limited. To cut a long story short, given that the farmland is registered to a local Argentinian company, the investors never received legal ownership of the land and so the shares never materialised. 

Carbon Credit Trading

The Carbon Credit scheme was an investment project that enticed people to invest with them as a way of fighting climate change and reducing our carbon footprint. With promises of healthy returns and a pat on the back for ‘doing your bit for the environment’, investors were duped completely and left to chase down the status of their so-called investment project as well as their money. 

It’s believed that the majority of illicit Carbon Credit Trading was done by the brokers Worldwide Community Partners, who at one point were considered one of the most reputable carbon trading companies the world over. While many investors did in fact recoup some of their money (which is an achievement in itself), there are likely many others still without their funds.

Ethical Forestry

One of the most notable environmental cases of mis-selling is the Ethical Forestry scheme, which related to offshore investments in a huge plot of trees in Costa Rica. What happened was that Ethical Forestry promised people (investors, long-term savers, and people with retirement savings) huge high-yield profits over time. The scheme was originally marketed under the title ‘Sustainable Timber Management’ and it asked investors to purchase 600 tree plots for £18,000.

The next phase of the scheme was to convince investors that the project would return over £100,000 after a 12-year period when the trees would be harvested and sold on. What’s most notable is the way the project was sold to investors. They really did use the environment for their own benefit!

The tree plots on sale in the Ethical Forestry scheme were all of the Melina variety, and Melina trees can grow to really impressive heights. They’re also more durable than other trees in Costa Rica and can better withstand the humidity. Being told that Melina trees are a prized investment and would survive for the duration of the 12 years (thus making as much money as possible), investors snapped up the opportunity.

Suffice to say that many of the investors never saw their money again. They were misled from the beginning, and neglected along every step of the way. 

Have you been affected? We can help

If you think that you have been affected by one of these schemes, or something that uses the environment in a similar way, then we can help. Simply fill out our quick enquiry form (it can be found anywhere on our website) and we’ll be in touch. Alternatively, you can get in touch with us here.

In the meantime, keep an eye on our blog. It has all the latest news and advice on mis-selling, because the best preventative measure you can take against mis-selling is to arm yourself with information.